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Massachusetts hides antiemployer HR rule in "probusiness" law

Massachusetts law has long required employers to give workers access to their personnel files upon request. Which is fine, I guess. But a new change to the law now requires companies to notify employees about any potentially negative information added to their files. The amendment, which Gov. Deval Patrick signed into law on August 5, was tucked away in an “economic development” bill laden with higher-profile items like the recent sales-tax holiday. (To see how "probusiness" the law is, check out the Governor's press release from the signing. No mention of this provision, natch.) I have no particular opinion on the rest of the law. But this new personnel-records rule is going to lead to more employee lawsuits.

Here are five things you need to know:

Employers must tell workers about negative entries.
An employer now has to notify an employee when it puts into a personnel record any information that has been or may be used to negatively affect the worker’s job. This must be done within ten days. The law leaves unchanged an employee’s right to review or get a copy of their records within five days of requesting it. The only sop to employers is a limit on these requests to two a year. But that limit does not apply to the notice and review of negative entries.

There could be serious penalties for failing to comply.
The Attorney General’s Office is charged with enforcing the statute. The amendment does not change the existing penalty, which is a fine of between $500 and $2,500. It’s not yet clear to what extent the AG’s Office will seek to enforce the law. Besides these penalties, the new law could cause problems for employers during other employment litigation. If discovery reveals that the employer failed to comply, this could hurt the employer’s credibility.

Employers now face a dilemma about documentation.
On the one hand, we’re always warning clients to document employee issues as much as possible, just in case the issues go to litigation. On the other hand, the new law makes putting relatively innocuous information into a personnel file a much more-provocative event. Now a quiet, low-level note in a file carries the risk of unnecessarily agitating the employee. Agitated employees become disgruntled employees, and disgruntled employees sue. Under the new law, employers are damned if they do and damned if they don’t.

Many employers are required to keep personnel records.
If you employ 20 or more workers, then you’re required to keep in personnel records any written information about:

identity

job title and description

pay information

start date

job application

evaluations

warnings

probationary periods

waivers

termination notice

any documents on discipline

The law doesn’t benefit anyone (except lawyers).
The amendment snuck in below the radar, without any discussion in the employment-law community. It’s antiemployer, in that it places companies at increased risk for employee lawsuits. While advocates could possibly argue that workers benefit from increased “transparency,” we disagree. There are times when a prudent employer should make a minor note in a file without escalating it to a human-resources event. Employees shouldn’t need to be stressed out by every less-than-positive note made in a file. But the new law makes that unavoidable.

So what do you do now?
This is a tricky one. How to handle it depends on your current practice of handling personnel records as well as on your corporate culture. Talk with your employment counsel about devising a strategy for handling employee documentation in light of this new law.

Unfortunately, a paper trail could now take you down the wrong path.

What do you think? Is this going to be a problem for your workplace? Sound off in the comments below.

Comments

Interesting new provision. I guess I can see the Catch-22 aspect to it that you note. However, I am not sure that in practice things will work all that differently than they do now.

What exactly would be the purpose of stuffing an employee's file full of negative information in secret? My assumption would be that employees should be informed of negative information being placed in their file as a form of counseling, so that they can be put on notice and improve their performance. Not doing so just makes it look like the employer is making a book on the employee to support a pre-determined decision to terminate.

I practice in Texas, which is a fairly anti-employee state. In Texas, employers are not even required to give employees access to their HR file under virtually any circumstances. So employees never know what has been placed in the file and said about them until it is used against them in a lawsuit or in the form of a negative reference.

On balance I think it works in an employer's favor to be open and honest with employees about how their performance is being assessed. If something is important enough to document it in a permanent file, then it is important enough to warrant having an honest conversation with the employee about the issue. This creates a record of fair-handed treatment that will likely head off many employment-related disputes. And for those disputes that do make it to the courthouse, a long record of open and honest counseling will go a long way to convincing a jury that the employer is in the right.

I agree with the above comment, I can't understand why a company would put something negative on an employee's file and not share that information with the employee. Unless an employer is building a criminal case or is investigating an employee (both of which should be privileged) any other information not shared with the employee is not likely useful in supporting employment action such as termination. I like the approach used on this site, very accessible for a lawyer

Thanks for your comment, Chris. I mainly agree with you, except for one thing. I do believe that there are some things that are too minor to warrant meeting with the employee. But under Massachusetts law, even those trivial things must go into the personnel file. And under the new rule, the employee must now be told. That's a situation where transparency leads to unneeded employee angst. Which is bad.

What I'd like to know is if an employee is terminated and feels it was a deliberate act but hard to prove does asking for your personell file and finding nothing detrimental in it give you a reason to obtain a lawyer for some sort of retribution?